Crypto trader behind “Coin Signals” sentenced to 42 months in prison
Jeremy Spence, a/k/a “Coin Signals,” was sentenced to 42 months in prison for defrauding more than 170 victims in connection with various cryptocurrency funds that he operated. Spence previously pleaded guilty before U.S. District Judge Lewis A. Kaplan, who imposed the sentence.
According to the allegations, from November 2017 through April 2019, Spence solicited investors in various cryptocurrency investment pools that he had created and managed. He solicited investments for several Funds, the largest and most active of which were the Coin Signals Bitmex Fund, a/k/a the “CS Mex Fund,” the Coin Signals Alternative Fund, a/k/a the “CS Alt Fund,” and the Coin Signals Long Term Fund. Investors who wanted to participate in a Fund would transfer cryptocurrency, such as Bitcoin and Ethereum, to Spence in order for him to invest it.
Spence solicited more than $5 million through false representations, including that his crypto trading had been extremely profitable when, in fact, his trading had been consistently unprofitable.
To forestall redemptions by investors, and to continue to raise money from investors to fund his scheme, Spence generated fictitious account balances, which he made available to investors online. Instead of accurately reporting the trading losses he was incurring, the account balances falsely indicated to investors that they were making money by investing with Spence.
To hide his trading losses, Spence used new investor funds to pay back other investors in a Ponzi-like fashion. In total, Spence distributed cryptocurrency worth approximately $2 million to investors substantially from funds previously deposited by other investors.
On top of his prison term, Spence, 25, of Bristol, Rhode Island, was sentenced to three years of supervised released and restitution in the amount of $2,847,743.00.